The Steal of the Century: How Guyana was sold for a horse

Feb 01, 2020 Features / Columnists, Peeping Tom

The oil agreement signed between the Government of Guyana and Exxon Mobil should no longer be renegotiated. The agreement should be annulled; scrapped, since it constitutes the swindle of the century.
Global Witness, a non-governmental organization with excellent credentials, has reportedly analyzed the deal and found that Guyana stands to lose US$55B in revenues because of the poor deal signed. I cannot begin to calculate what that sum converts to in Guyana dollars.
This is not Kaieteur News saying this. This is a respected and credible non-governmental organization which is making the pronouncement. On its website, Global Witness explains that it is committed to protecting human rights and the environment by fearlessly confronting corruption and challenging the systems that enable it. It says that it desires a better world – where corruption is challenged and accountability prevails, all can thrive within the planet’s boundaries, and governments act in the public interest.
The NGO hired a consultancy to examine the deal, and its findings confirmed what this newspaper has been saying all along. Guyana has gotten 50% profit oil while a reasonable sum would have been between 65% and 85%. The median would be 75% which means that Guyana shortchanged itself of about 25%. The consultancy also indicated that the royalty rates were below what prevails internationally, something that this newspaper had long pointed out.
According to a Stabroek News report, published in yesterday’s edition, the terms of the license were described as exploitative and unjustifiably bad. This newspaper has been saying it all along.
What Global Witness has not yet picked up on is the fact that there is a resource which is just a lucrative as the oil which is in the hands of Exxon. That is the natural gas which usually is associated with petroleum production. When the oil comes up, so too does this gas which is just as or far more valuable than the oil.
Guyana knew this when it signed the deal with Exxon. Yet, it has done nothing to force Exxon to capture this gas, or at least most of it, so that it can be sold. I am saying that Guyana can earn just as much if not more for the gas than it will for the petroleum. But there is no compulsion to force Exxon to capture and transport the gas for processing.
Instead, what we are learning is that the gas is being flared. Which means that it is being released into the atmosphere – this is what is called flaring.
This makes a mockery of the plan for a green state. How can a country which is projecting itself as respecting the environment, allowing for the flaring of such massive amounts of natural gas. Instead of reducing global warming, Guyana is contributing to it by not outlawing the flaring of gas and demanding that the gas be processed and sold on the international market.

This is the double whammy which Guyana faces. Not only has it been robbed blind by the terms of the contract which was signed, but no provision is being made to earn the billions which can be earned from the natural gas.
The deal with the oil companies is so rotten that it is beyond rectification through renegotiation. The entire agreement should be scrapped. A new deal should be renegotiated, this time by experts.
It cannot be done by the present government. They have lost the moral standing to sign any future oil agreements. It is time to ask Exxon and company to halt production until a new agreement is signed. This is the only way out. No self-respecting nation will go along with the scandalous agreement which has been signed by the government.

(The views expressed in this article are those of the author and do not necessarily reflect the opinions of this newspaper)

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The Steal of the Century: How Guyana was sold for a horse

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